http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html ie Nasdaq bubble...Japan.... Same goes for housing....not in real terms....
The author is of the view trillions of bad loans are going to be picked up by the taxpayer in the US and elsewhere but don't believe the hysterics deflation will be the name of the game not inflation. Fair enough. So what he really is saying is governments and central banks can print trillions of $ for free without it having an effect on prices. But... No such thing as a free lunch right. Who will be paying?
........................................................................................ This is where there seems to be quite a bit of confusion.... One should question sustainability of pricing.... ie Fed foots the bill this time....who pays it next time.... ie. are Fed payments sustainable....and will they replace what was lost.... Two points....not sustainable....and will not replace what was lost.... In fact....someone has to pay the Fed tab as well....which takes away from what could have been....
Unsustainability can go a long way. If the author and others are right with their assumption of inevitable deflation to come we will see 300% debt to GDP ratio's across the board before a change of course could be in the cards eventually.
............................................................................. Interesting dilemma.... Govt. needs to downsize and change its revenue scheme to better suit sustainability and a truly progressive and competitive economic environment.... Currently is doing quite the opposite....
This is great! Since wages are the last thing to deflate, that means i will get to keep my fat bloated salary and everything will be cheap. I will buy bread for 10 cents, a gallon of gas for a quarter, a 3,000 sq ft penthouse in NYC for 40k...yeah life is full of sunshine and rainbows again. whats that? whos going to pay for it? I will! With my inflated salary....I dont care to know where the money comes from in my inflated paycheck...Let all the bankers and politicians work the rest of it out and stop ruining my trip!